|
Document Type |
: |
Article In Journal |
|
Document Title |
: |
Monetary Dynamics and Gold Dinar: An Empirical Perspective الديناميكة النقدية والدينار الذهبي : منظور تجريبي |
|
Subject |
: |
Article |
|
Document Language |
: |
English |
|
Abstract |
: |
According to proponents of Gold Dinar particularly Meera and Aziz
(2002), termed as Dinarists’, the fiat monetary system is inherently unstable. In
providing an empirical perspective on this contention, this paper investigates
monetary dynamics of a Muslim economy, Malaysia. To this end, the paper
adopts a vector autoregressive (VAR) framework to document dynamic
interactions between money supply and various macroeconomic variables
including real output, price level, interest rate and stock prices. The results seem
to provide some support for the Dinarists’ contention. First, the results portray
clearly an important causal role of money supply for other macroeconomic
variables. Second, we document some evidence that expansion in money supply
is inflationary. Lastly, money supply – interest rate and money supply – stock
price interactions are destabilizing. More importantly, expansion in money
supply has the potential of breeding asset price bubbles. However, apart from
the above findings, we also find that money supply reacts positively to increase
in real output. Since the accommodative role of money supply is necessary or a
pre-condition for expansion in production, arguments for Gold Dinar need to be
qualified. Moreover, the viability of Gold Dinar comes into question when
political and international aspects of monetary standards are considered. |
|
ISSN |
: |
1018-7383 |
|
Journal Name |
: |
Islamic Economics Journal |
|
Volume |
: |
19 |
|
Issue Number |
: |
2 |
|
Publishing Year |
: |
1427 AH
2006 AD |
|
Number Of Pages |
: |
17 |
|
Article Type |
: |
Article |
|
Added Date |
: |
Sunday, October 11, 2009 |
|
Researchers
| منصور إبراهيم | Mansor H. Irahm | Researcher | | |
|